The textbook definition of entrepreneur speaks to that classic perception. Consider, for example, Merriam-Webster’s definition that explains entrepreneur as “one who organizes, manages, and assumes the risks of a business or enterprise.”
Harvard Business School professor Howard Stevenson, whose research and teaching focused on the field of entrepreneurship, said, “Entrepreneurship is the pursuit of opportunity beyond resources controlled.”
Types of entrepreneurship
However, entrepreneur, entrepreneurial and entrepreneurship have expanded meanings today. They are sometimes used to describe individuals who are able to identify unmet needs in a variety of settings, including in existing companies, and seek to find ways to meet those needs.
As such, those terms are also applied to a way of thinking and a way of organizing or managing, rather than simply a way to develop a new business.
For example, people describe innovative individuals in nonbusiness settings such as nonprofits and social movements as social entrepreneurs.
Innovative individuals working in existing companies are sometimes called intrapreneurs. Other terms used in the corporate setting are corporate entrepreneurship and intrapreneurship.
Additionally, the terms entrepreneur, entrepreneurial and entrepreneurship are sometimes applied to individuals who identify and pursue new ways of working or new processes and procedures regardless of their positions or settings. It is occasionally used as a synonym for a go-getter, who could also be described as having an entrepreneurial spirit.
What an entrepreneur does
In the classic sense of the term, an entrepreneur starts a new business venture, building the organization by fulfilling what he or she sees as an unmet market need.
In this regard, an entrepreneur also meets the definition of both a business founder and a small business owner. However, not every business founder or small business owner is an entrepreneur. Businesses that were started to provide existing products or services in ways similar to others already in the market are not considered entrepreneurial, even if they provide superior products or services.
To meet the definition of entrepreneurship, the business venture requires a new or unique element or process.
For example, the four co-founders of Whole Foods Markets are considered entrepreneurs because when they founded the store in 1980, they saw an opportunity providing natural food products to fill an unmet need for such items in an established industry (grocery stores) that focused more on delivering commercial and processed products.
Although every entrepreneurial endeavor will follow its own path, entrepreneurs share many common traits as they establish their businesses.
They often build their organizations from the ground up, developing business plans that not only articulate the market need they plan to fulfill, but also how they intend to produce and deliver their products or services. In this way, entrepreneurs are following recommended standard business practices.
Entrepreneurs typically operate on a limited budget, and many start by financing their operations with their own money or soliciting funds from friends and family members — a financial scenario commonly called bootstrapping.
Entrepreneurs, like other business leaders, can take different paths as they try to grow their organizations. They can opt to produce minimally viable products to test the market, or they may decide to partner with another company to better their chances of success. They might obtain financing from new sources such as angel investors and venture capitalists, who seek out early-stage companies that have demonstrated promise and potential for future success.
As their companies grow, entrepreneurs can opt to continue running their business, sell their businesses or merge them with others. Some remain as presidents and CEOs; some hand over operational leadership to others, preferring to handle other roles, including serving as the visionaries that keep their businesses growing and on the cutting edge of new opportunities.
Personality types and characteristics
Entrepreneurs are often characterized as visionaries. Case in point is Apple co-founder Steve Jobs, who is credited with developing and bringing to market revolutionary computer products.
They are also risk-takers, but successful entrepreneurs are calculated in their risks. They’re also adaptable and agile, so they can adjust their objectives as markets and their businesses evolve.
Other characteristics commonly seen among successful entrepreneurs include:
An inner drive
Examples of entrepreneurs span not only centuries, but industries. Commonly recognized entrepreneurs include:
Richard Branson, founder of the Virgin Group of 400-plus companies
Fashion designer Coco Chanel
Entertainment mogul Walt Disney
Prolific inventor Thomas Edison
CNN founder Ted Turner
History and origins
The term entrepreneur comes from the Old French word entreprendre, meaning to undertake. It’s the same French word that gives English its word enterprise.
Both terms date back hundreds of years in the English language, according to Merriam-Webster. However, scholars say entrepreneurship dates back hundreds, if not thousands, of years, as medieval and even ancient explorers and merchants established ventures to bring products to market.